Choosing a Business Broker: A Checklist

Choosing a Business Broker: A Checklist

Many business owners who have decided to sell their companies use business brokers because they understand that selling to the right buyer can be a complex process. They also want to get the best price for their business and not take time away from running their company to achieve a successful sale. Once you have decided to sell your business, it is crucial to select the right business broker to work with you making certain the deal is made on your best possible terms.

There are five key considerations when choosing a business broker that is right for you:

  1. Industry Knowledge – Make certain that the business broker you are considering understands your industry. Ask if they have sold other businesses in your industry and try to get client and business names and references. Find out what they know about the market for businesses in your industry and if they are aware of important trends that are impacting it currently or may impact it in the future.
  2. Personality Compatibility – It is essential for you to be comfortable with the broker helping you sell your business. You will have many candid conversations about your goals and how to reach them with your broker. You need to feel you can trust the broker with the most detailed information about finances and beyond. Keep in mind that you have worked hard to make your business successful and you want to feel as though your broker understands and is familiar with how you operate.
  3. Confidentiality - Keeping confidential the fact that your business is for sale is extremely important for a number of reasons. One concern is that if your customers find out that you are considering a sale, they may switch their account to your competition, thinking that a new owner would not provide the same level of service or quality they are used to at your company. Your employees may be concerned that their jobs are not secure with a new owner and perhaps look for employment elsewhere. Suppliers may try to change your pricing structure because they might think that you are no longer a dependable customer. And if your competition finds out that your business is for sale, they will likely make that known to the public – including your customers – seeing the potential sale as an opportunity to take your market share. The right broker understands confidentiality is crucial to the sale of your business and will be able to guide you through the best practices to prevent leaks. 
  4. Size Matters – Brokers who have access to thousands of buyers will have the best chance of selling your business to the right buyer for the best price. Look for a brokerage company with an extensive database of active buyers. Additionally, a large network of brokers will ensure that they have brokers who specialize in every type of business and can provide the experience that comes with selling many businesses just like yours.
  5. Access to resources to market the sale of the business – Does your business broker have access to a vast internal marketplace for business sales? Do they have access to thousands of potential buyers for your business and the ability to create competition among those that are qualified to get the best price? Will the broker spend the money needed to market your business through advertising? Without these assets the sale will take longer and may result in you leaving money on the table.

Transworld Business Advisors can answer yes to all of these questions and provide the marketing services you need in a confidential and supportive environment. We have been successfully specialising in the sale of businesses and commercial real estate for more than 35 years. Contact us and let’s talk about how we can help you and your business goals.